18 Jul Inside the Life of a Day Trader: Part iii
Continuing from last week, the opening bell has just rung and the action starts. I sit back in my chair and watch the numbers fly across the screen. The first 30 minutes of the trading day usually start off wildly as buyers and sellers from the previous day line up to buy or sell stock. The action is volatile and the prices of stocks can move up or down sharply. This doesn’t bother me as I have my orders set and ready to execute. Once my orders are triggered then I ensure that I protect myself if the stock doesn’t go in my direction. Kinda like buying insurance. If the stock doesn’t move in my direction quickly then I get out and exit my position with a small loss. If the stock is working in my favour then I try to let it ride and extract as much profit from it. I don’t panic or become too emotional because I have a plan written down and already have an idea on what I should do next most of the time. If the stock price reaches my target, I make sure I sell some or all of my position. A lot of the activity or as we call it, action in the stock market happens usually in the first 2 hours of the trading. If my trade goes well, I could be done in the first 2 hours and then call it a day. If I decide to trade the rest of the day, I usually don’t stare at the computer screens all day but set the computer to alert me if anything happens to the stocks that I’m trading. Stay tuned for part iv.